Journal Search Engine
Search Advanced Search Adode Reader(link)
Download PDF Export Citaion korean bibliography PMC previewer
ISSN : 2233-4165(Print)
ISSN : 2233-5382(Online)
Journal of Industrial Distribution & Business Vol.9 No.8 pp.17-26

Analysis of Priority Countries and Products for Indonesian Export Diversification in Latin America

Febria Ramana*,Lili Retnosari**
* First Author and Corresponding Author, Statistics of Kaur Regency, Jl. Peltu M.Ilyas T. Panji Alam Pd. Kempas Bintuhan, Kaur, Bengkulu, Indonesia; Tel: +6281274643595, E-mail:
** Co-Author, Statistics of Pulang Pisau Regency, Jl. Trans Kalimantan KM 98 Mantaren I, Pulang Pisau 74811, Central Kalimantan, Indonesia. E-mail:
May 26, 2018. July 16, 2018. August 15, 2018.


Purpose - Indonesian economy often receives negative impact from external factors, particularly through trade linkage. To mitigate that impact, the export market and product diversification should be established. Latin America is one of the potential regions to augment the Indonesian export market.
Research design, data, and methodology - This study attempts to classify the potential market and product for Indonesian export, particularly in Latin America, by using panel regression, trade complementarity, and export similarity index over the period 2000-2015. Regression was also used to examine whether the presence of the Indonesian Trade Promotion Center (ITPC) can support diversification.
Results - Based on regression results, those indexes established Chile, Uruguay, Suriname, and Ecuador as the priority countries with the products: animal and vegetable oils, fats and waxes; chemicals and related products; miscellaneous manufactured articles; commodities and transactions.
Conclusions - The results of the regression concludes that the trade complementarity index gave a significant positive effect to boost Indonesian export, whereas, the export similarity index gave a significant negative effect. The regression also conclude that ITPC gave a significant positive impact on Indonesian export. For instance, the government should prioritize those countries and products and also develop ITPC there to optimize Indonesian export.

JEL Classifications: F10, F13, F14.





    1. Abidin, B., & Sahlan, R. (2013). The Determinants of Exports between Malaysia and The OIC Member Countries: A Gravity Model Approach. Procedia Economics and Finance, 5, 12–19.
    2. Baltagi, H. (2011). Econometrics (5th ed.). New York: Springer.
    3. Greene, W. H. (2012). Econometrics Analysis (7th ed.). Upper Saddle River, NJ: Prentice Hall.
    4. Gujarati, D., & Porter, D. C. (2008). Basic Econometrics (5th ed.). New York: McGraw-Hill.
    5. Hapsari, I. M., & Mangunsong, C. (2006). Determinants of AFTA Members’ Trade Flows and Potential for Trade Diversion. Asia-Pacific Research and Training Network on Trade Working Paper Series, No.21. Retrieved May 22, 2018 from resources/determinants-afta-members%E2%80%99-trade-flows-and-potential-trade-diversion-awp-no-21
    6. Harahap, A. B., Bary, P., Nurliana, L., & Satyanugroho, R. (2015). Dampak Spillover Shock Eksternal Pada Perekonomian Indonesia: Pendekatan Global VAR. Working Paper Bank Indonesia WP/2/2015. Retrieved May 22, 2018 from doc/317018896/Dampak-Spillover-Shock-Eksternal-Pada-Perekonomian-Indonesia
    7. Haryotejo, B. (2013). Analisa Diversifikasi Pasar Ekspor Komoditi Udang Indonesia. J. Sosek KP, 8(1), 85-91.
    8. Kim, S. J. (2013). Trade Complementarity Between South Korea And Her Major Trading Countries: Its Changes over the Period of 2005-2009. World Review of Business Research, 3(2), 64-83.
    9. Konkakov, A., & Kubayeva, G. (2016). Progress in Diversification of the Economy in Kazakhstan. Working Paper Maastricht School of Management No.2016/8. Retrieved May 22, 2018 from
    10. Krugman, P. (1991). The move to free trade zones. In Symposium on Policy Implications of Trade and Currency zones, Sponsored by the Federal Reserve Bank of Kansas City.
    11. Mubeen, N. (2016). Toward Measurement and Determinant of Export Diversification: An Empirical Analysis of Pakistan. Pakistan Journal of Commerce and Social Sciences, 10(3), 588-605.
    12. Nasrudin, Sinaga, B. M., Firdaus, M., & Walujadi, M. (2014). China-ASEAN Free Trade: Complementary or Competition. IOSR Journal of Economics and Finance (IOSR-JEF), 3(4), 23-31.
    13. Noureen, S., & Mahmood, Z. (2014). Explaining Trends and Factors Affecting Export Diversification in ASEAN and SAARC regions: An Empirical Analysis. Nust Journal Of Social Sciences And Humanities, 2(1), 1-28.
    14. FIS. (2017). Chile and Indonesia pledge to complete FTA negotiations. Retrieved May 22, 2017 from
    15. Plummer, M. G., Cheong, D., & Hamanaka, S. (2010). Methodology for Impact Assessment of Free Trade Agreements. Manila: Asian Development Bank.
    16. Papageorgiou, C., Spatafora, N., & Wang, K. (2015). Diversification, Growth, and Volatility in Asia. Policy Research Working Paper 7380, World Bank.
    17. Saputri, A. S., Perdagangan, K., & Ardiyanti, S.T.(2016). Dampak Keberadaan Perwakilan Perdagangan Luar Negeri Terhadap Kinerja Non Migas Indonesia. Buletin Ilmiah Litbang Perdagangan, 10(2), 203-224.
    18. Sultan, Z. S., & Haque, I. (2014). Potential Export Divesification in Saudi Arabia. Journal of American Science, 10(3), 16-24.
    19. Wang, P. Z., & Liu, X. J. (2015). Comparative Analysis of Export Similarity Index between China dan EU. International Conference on Management Science and Management Innovation (MSMI 2015).Retrieved May 22, 2018 from index.php/bilp/article/view/281
    20. Waheed, A., & Abbas, S. (2015). Potential Export Markets for Bahrain: A Panel Data Analysis. International Journal of Trade, Economics, and Finance, 6(3), 165-169.
    21. Yu, C., & Qi, C. (2015). Research on the Complementarity and Comparative Advantages of Agricultural Product Trade between China and CEE Countries. Journal of Service Science and Management, 8, 201-208.